ExxonMobil profits drop $1.3 billion

Allen Baker

Earnings at Exxon Mobil Corp. slid $1.3 billion or 29 percent in the third quarter, mostly due to declining prices for oil and gas. Net income was $3.18 billion, down from $4.49 billion a year earlier. The company made $4.46 billion in the second quarter this year.

Revenues dropped $5.6 billion, or nearly 10 percent from the year-ago quarter.

The upstream side of the business was the big weak area, with a big drop in chemicals as well. Merger-related charges cut earnings $140 million in the 2001 quarter, while the company showed $200 million on the plus side in that category for the 2000 quarter. Downstream earnings were the bright spot in this quarter’s results, with higher profits despite lower refinery throughput.

“The reduction in earnings reflected crude oil and natural gas realizations, both of which declined significantly,” said Lee R. Raymond, the company’s chairman. “The drop in crude oil prices was especially steep in the latter half of September.’’

But the quarterly report contained warning signs beyond the price issue.

Liquids production actually declined 1 percent in the quarter from 2.5 million barrels daily to 2.48 million. That drop was a result of reduced production from mature areas and the impacts of civil unrest, the company said.

Natural gas production was down as well, averaging 8,597 million cubic feet a day, down from 8,735 in the same quarter a year earlier. ExxonMobil said worldwide gas production was up 3 percent outside Indonesia, where unrest curtailed production from the big field in Aceh province.

U.S. upstream operations brought in $767 million, down 37 percent from a year earlier. Outside the U.S., upstream operations brought in $1,364 million, down 28 percent. The company did spend $551 million more on upstream capital and exploration projects in the quarter, so that cut into profits.

Refinery throughput dropped to just under 5.6 million barrels daily, from more than 5.7 million a year ago, but downstream profits rose 5 percent to $942 million from $893 million a year earlier.

Chemicals brought in $156 million, down from $264 million in the 2000 quarter. That’s a drop of 41 percent

Total revenue was $53 billion for the quarter, down from $58.6 billion a year earlier. Revenues totaled $56.5 billion in the second quarter this year.